- Revenue of $843.9 million, up 4.0 percent from the second quarter
- GAAP net income rose to $84.9 million, or $0.15 per diluted share, from the second quarter's GAAP net loss of $141.0 million, or $0.25 per share
- GAAP gross margin increased to 46.5 percent from the second quarter's 16.6 percent
Quarterly Highlights
($ in millions except per -----------------------------------
share data) Q3 FY2011 Q2 FY2011 Q3 FY2010
----------- ----------- -----------
Revenue $843.9 $811.2 $903.2
----------- ----------- -----------
GAAP:
Gross margin 46.5% 16.6% 43.4%
----------- ----------- -----------
Net income (loss) $84.9 ($141.0) $107.6
----------- ----------- -----------
Income (loss) per share $0.15 ($0.25) $0.19
----------- ----------- -----------
"We have turned the corner," said Jen-Hsun Huang, NVIDIA's president and
chief executive officer. "We have restored our speed of execution and are
regaining share in desktops. Only seven months after shipping our first
processor based on the Fermi architecture, we have begun production on
seven more GPUs, including the GeForce GTX 580, which sets a new standard
for performance. The Fermi architecture is now in every segment of our
desktop, notebook and workstation product lines.
"We've also made big strides this quarter in positioning ourselves at the
center of cloud and mobile computing, which are transforming the computer
landscape. Tesla now powers some of the world's fastest and greenest
supercomputers. And Tegra will soon be featured in a range of smartphones
and tablets we're building with our partners," he said.
Outlook
The outlook for the fourth quarter of fiscal 2011 is as follows:
- Revenue is expected to be up 3 to 5 percent from the third quarter.
- GAAP gross margin is expected to be flat.
- GAAP operating expenses are expected to be approximately $300 million.
- GAAP tax rate is expected to be 18 to 20 percent.
- NVIDIA held the second annual GPU Technology Conference, which
highlighted the growth of parallel computing, with five times more papers
submitted and twice as many sessions.
- The Tianhe-1A supercomputer, which incorporates 7,168 GPUs, was
unveiled as the world's fastest supercomputer. Housed in the National
Supercomputer Center, in Tianjin, China, the system is three-times more
energy efficient than an equivalent CPU-only system and takes up half as
much floor space.
- NVIDIA launched 12 new GPU products, including the NVIDIA® GeForce® GTS 450 and GT 430.
- After quarter end, NVIDIA launched and shipped the GeForce GTX 580 graphics card, which was received positively by media and industry analysts.
Commentary on the quarter by David White, NVIDIA chief financial officer and executive vice president, is available at www.nvidia.com/investor. Conference Call and Web Cast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its third quarter fiscal 2011 financial results and current financial prospects today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call, please dial (212) 231-2900. A live Web cast (listen-only mode) of the conference call will be accessible at the NVIDIA investor relations Web site www.nvidia.com/ir and at www.streetevents.com. The Web cast will be recorded and available for replay until the company's conference call to discuss its financial results for its fourth quarter fiscal 2011. Non-GAAP Measures
To supplement NVIDIA's Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net income, non-GAAP net income per share and free cash flow. In order for NVIDIA's investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude a charge related to the weak die/packaging material set that was used in certain versions of NVIDIA's previous generation MCP and GPU products, net of insurance reimbursements, a non-recurring charge related to a tender offer purchase, and the associated tax impact of these items, where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less purchases of property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user's overall understanding of the company's historical financial performance. The presentation of the company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies. About NVIDIA
NVIDIA (
NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------ -------------------------
October 31, October 25, October 31, October 25,
2010 2009 2010 2009
----------- ------------ ------------ -----------
Revenue $ 843,912 $ 903,206 $ 2,656,933 $ 2,343,957
Cost of revenue 451,850 511,423 1,674,202 1,605,755
----------- ------------ ------------ -----------
Gross profit 392,062 391,783 982,731 738,202
Operating expenses
Research and
development 204,527 197,948 633,267 692,600
Sales, general and
administrative 83,752 85,990 273,495 278,829
----------- ------------ ------------ -----------
Total operating
expenses 288,279 283,938 906,762 971,429
----------- ------------ ------------ -----------
Operating income (loss) 103,783 107,845 75,969 (233,227)
Interest and other
Income (loss), net (198) 2,362 9,294 11,512
----------- ------------ ------------ -----------
Income (loss) before
income tax expense 103,585 110,207 85,263 (221,715)
Income tax expense
(benefit) 18,723 2,630 3,768 (22,652)
----------- ------------ ------------ -----------
Net income (loss) $ 84,862 $ 107,577 $ 81,495 $ (199,063)
=========== ============ ============ ===========
Basic net income (loss)
per share $ 0.15 $ 0.20 $ 0.14 $ (0.36)
=========== ============ ============ ===========
Diluted net income
(loss) per share $ 0.15 $ 0.19 $ 0.14 $ (0.36)
=========== ============ ============ ===========
Shares used in basic
per share computation 577,323 551,283 572,420 546,737
Shares used in diluted
per share computation 582,648 574,381 584,500 546,737
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 31, January 31,
2010 2010
----------- -----------
ASSETS
Current assets:
Cash, cash equivalents and marketable securities $ 1,987,220 $ 1,728,227
Accounts receivable, net 399,502 374,963
Inventories 377,812 330,674
Prepaid expenses and other current assets 43,168 46,966
----------- -----------
Total current assets 2,807,702 2,480,830
Property and equipment, net 585,672 571,858
Goodwill 369,844 369,844
Intangible assets, net 112,642 120,458
Deposits and other assets 39,719 42,928
----------- -----------
Total assets $ 3,915,579 $ 3,585,918
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 324,770 $ 344,527
Accrued liabilities and other current liabilities 491,719 439,851
----------- -----------
Total current liabilities 816,489 784,378
Other long-term liabilities 177,851 111,950
Capital lease obligations, long term 23,359 24,450
Stockholders' equity 2,897,880 2,665,140
----------- -----------
Total liabilities and stockholders' equity $ 3,915,579 $ 3,585,918
=========== ===========
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Three Months Ended
-----------------------------------------
October 31, August 1, October 25,
2010 2010 2009
----------- ----------- -----------
GAAP gross profit $ 392,062 $ 134,292 $ 391,783
GAAP gross margin 46.5% 16.6% 43.4%
Net charge against cost
of revenue arising from
a weak die/packaging
material set - 181,193 (A) (24,115) (A)
Stock option purchase
charge related to cost
of revenue - - -
----------- ----------- -----------
Non-GAAP gross profit $ 392,062 $ 315,485 $ 367,668
=========== =========== ===========
Non-GAAP gross margin 46.5% 38.9% 40.7%
GAAP operating expenses $ 288,279 $ 309,499 $ 283,938
Net charge against
operating expenses
arising from a weak
die/packaging
material set - (12,705) (A) 990 (A)
Stock option purchase
charge related to
operating expenses - - -
----------- ----------- -----------
Non-GAAP operating expenses $ 288,279 $ 296,794 $ 284,928
=========== =========== ===========
GAAP net income (loss) $ 84,862 $ (140,961) $ 107,577
Net charge arising from
a weak die/packaging
material set - 193,898 (A) (25,105) (A)
Stock option purchase
charge - - -
Income tax impact of
non-GAAP adjustments - (32,828) (C) (5,072) (C)
----------- ----------- -----------
Non-GAAP net income (loss) $ 84,862 $ 20,109 $ 77,400
=========== =========== ===========
Diluted net income (loss)
per share
GAAP $ 0.15 $ (0.25) $ 0.19
=========== =========== ===========
Non-GAAP $ 0.15 $ 0.03 $ 0.13
=========== =========== ===========
Shares used in GAAP diluted
net income (loss) per share
computation 582,648 572,764 574,381
Cumulative impact of
non-GAAP adjustments - 9,609 (D) -
----------- ----------- -----------
Shares used in non-GAAP
diluted net income (loss)
per share computation 582,648 582,373 574,381
=========== =========== ===========
Metrics:
GAAP net cash flow provided
by / (used in) operating
activities $ 212,177 $ 34,344 $ 141,317
Purchase of property and
equipment and intangible
assets (21,823) (37,644) (16,593)
----------- ----------- -----------
Free cash flow $ 190,354 $ (3,300) $ 124,724
=========== =========== ===========
Nine Months Ended
----------------------------
October 31, October 25,
2010 2009
----------- -----------
GAAP gross profit $ 982,731 $ 738,202
GAAP gross margin 37.0% 31.5%
Net charge against cost
of revenue arising from
a weak die/packaging
material set 181,193 (A) 95,878 (A)
Stock option purchase
charge related to cost
of revenue - 11,412 (B)
----------- -----------
Non-GAAP gross profit $ 1,163,924 $ 845,492
=========== ===========
Non-GAAP gross margin 43.8% 36.1%
GAAP operating expenses $ 906,762 $ 971,429
Net charge against
operating expenses
arising from a weak
die/packaging
material set (12,705) (A) 1,929 (A)
Stock option purchase
charge related to
operating expenses - (128,829) (B)
----------- -----------
Non-GAAP operating expenses $ 894,057 $ 844,529
=========== ===========
GAAP net income (loss) $ 81,495 $ (199,063)
Net charge arising from
a weak die/packaging
material set 193,898 (A) 93,949 (A)
Stock option purchase
charge - 140,241 (B)
Income tax impact of
non-GAAP adjustments (32,828) (C) (16,652) (C)
----------- -----------
Non-GAAP net income (loss) $ 242,565 $ 18,475
=========== ===========
Diluted net income (loss)
per share
GAAP $ 0.14 $ (0.36)
=========== ===========
Non-GAAP $ 0.41 $ 0.03
=========== ===========
Shares used in GAAP diluted
net income (loss) per share
computation 584,500 546,737
Cumulative impact of
non-GAAP adjustments - 17,761 (D)
----------- -----------
Shares used in non-GAAP
diluted net income (loss)
per share computation 584,500 564,498
=========== ===========
Metrics:
GAAP net cash flow provided
by / (used in) operating
activities $ 241,124 $ 418,562
Purchase of property and
equipment and intangible
assets (76,547) (55,026)
----------- -----------
Free cash flow $ 164,577 $ 363,536
=========== ===========
(A) Excludes a charge related to the weak die/packaging material set that
was used in certain versions of our previous generation chips, net of
insurance reimbursement.
(B) During the three months ended April 26, 2009, the Company completed a
tender offer to purchase outstanding stock options which resulted in a
charge of $140.2 million, $11.4 million of which was associated with
cost of revenue and $128.8 million with operating expenses.
(C) The income tax impact of non-GAAP adjustments has only been reported
during fiscal quarters that include other GAAP to non-GAAP reconciling
items, as well as in the full fiscal year results during which the GAAP
to non-GAAP reconciling items occur. As such, any effective tax rate
differences between GAAP and non-GAAP results that result from such
adjustments have not been reported separately in the non-GAAP results
for a fiscal quarter that does not contain other GAAP to non-GAAP
reconciling items.
(D) Reflects an adjustment to diluted shares to reflect a non-GAAP net
income versus a GAAP net loss.
Contact Information: For further information, contact: Michael Hara Investor Relations NVIDIA Corporation (408) 486-2511 mhara@nvidia.com Robert Sherbin Corporate Communications NVIDIA Corporation (408) 566-5150 rsherbin@nvidia.com